TaxRambling.com

Recently I have been complaining that the Commissioner has decided the word “taxi” in the GST Act includes an Uber (so Ubers have to register for GST and so he gets more GST) but in the FBT Act the word “taxi” does not include an Uber (so the FBT exemption for taxis does not apply to Ubers and he gets more FBT).

But now the Government has released draft legislation to make amendments that are “minor technical changes to correct typographical and numbering errors, bring provisions in line with modern drafting conventions, repeal inoperative provisions, remove administrative inefficiencies and update references.” But hidden in this draft legislation is the following…

1.60 The Bill amends the definition of ‘taxi’ in the Fringe Benefits Tax Assessment Act 1986 to resolve administratively difficulties with the former definition which resulted from ride sharing providers entering entry into the market.

1.61 Formerly, the Fringe Benefits Tax Assessment Act 1986 defined a taxi as ‘a motor vehicle licenced to operate as a taxi’. As a result of ride sharing providers entering into the market, this has become difficult to administer as the meaning of ‘licensed to operate as a taxi’ is highly contentious and may differ considerably between the states and territories depending on their licensing laws.

1.62 To avoid these difficulties, the new law replaces references to a ‘taxi’ with ‘a car used for taxi travel (other than a limousine)’. The term ‘taxi travel’ is defined as having the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999, namely, ‘travel that involves transporting passengers by taxi or limousine, for fares’. This preserves the existing policy of covering vehicles used for travel involving transporting passengers for a fare by way of a car but not including luxury cars such as limousines.

If the definition of “taxi” in the FBT Act is exactly the same as in the GST Act, the Commissioner will have no choice to change his opinion on what the term “taxi” means in the FBT Act and therefore have to extend the taxi FBT exemptions to Ubers.